After years of maintaining a veneer of economic resilience, the stark reality is finally dawning on Russia: its economy is stagnating, and the implications for Vladimir Putin's war in Ukraine could be profound. What this really means is that the Kremlin's ability to sustain its military campaign is being severely tested, with far-reaching consequences not just for the battlefield, but for Putin's grip on power.
The Unraveling of Russia's Economic Facade
For a while, Russia appeared to be weathering the storm of Western sanctions and the costs of its war. Reuters reports that the country's GDP grew by an impressive 3.5% in 2023, confounding many analysts who had predicted a sharper downturn. However, the bigger picture here is that this growth has been fueled by Putin's massive spending on the war effort, which has now reached an estimated 10% of Russia's GDP.
The problem is that this wartime economic model is starting to unravel. The New York Times reports that many civilian industries have stopped growing, and some have even gone into decline. Businesses are struggling to secure new loans or get paid by clients, while the ruble has dropped to its weakest level in two years. Inflation, meanwhile, is now running at nearly 10%, eroding living standards for ordinary Russians.
A Reckoning for Putin's War Effort
What this means for Putin's war in Ukraine is that the Kremlin's ability to sustain its military campaign is being severely tested. Foreign Policy analysis suggests that Russia is running out of key weapons and facing a labor shortage as more and more men are conscripted into the military. The combination of economic stagnation, high inflation, and the drain on resources is making it increasingly difficult for Putin to maintain his military momentum.
The bigger picture here is that Putin's dream of a prolonged war of attrition against Ukraine may be slipping away. As the Russian economy continues to stagnate, the Kremlin's ability to fund the war, equip its troops, and sustain public support will become increasingly tenuous. This could ultimately force Putin to make difficult choices about the future of the conflict, with potentially far-reaching consequences for his hold on power.